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PHL stocks rebound as inflation eases in August

STOCKS climbed on Tuesday as August inflation came in better than expected, which could indicate that prices are moderating.

The bellwether Philippine Stock Exchange index (PSEi) went up by 33.56 points or 0.50% to close at 6,709.60 on Tuesday, while the broader all shares index rose by 9.24 points or 0.26% to 3,550.95.

“Philippine shares edged higher as the latest PH CPI (consumer price index) print showed that the overall cost of goods seemed to be moderating, while major US stock indices are poised to resume later this evening,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message on Tuesday.

“The PSEi inched up by 0.5% today to close at 6,709.60 as the market was greeted by the release of the August inflation print, which eased to 6.3% from the 6.4% in July, also coming out slightly better than estimates,” Unicapital Securities, Inc. Equity Research Analyst Ralph Jonathan B. Fausto said in a Viber message on Tuesday.

Headline inflation slowed to 6.3% in August from the near four-year high of 6.4% seen in July, the Philippine Statistics Authority (PSA) reported on Tuesday.

While the result was within the Bangko Sentral ng Pilipinas’ (BSP) 5.9-6.7% forecast for the month and below the 6.4% median estimate in a BusinessWorld poll of analysts, it was the fifth consecutive month inflation went beyond the central bank’s 2-4% target. It was also faster than the 4.4% headline print logged in August 2021.

Month on month, inflation picked up by 0.4%.

PSA data showed food and transport costs eased. The rise in prices of heavily-weighted food and beverages slowed to 6.3% year on year in August from 6.4% in July. Transport likewise eased to 14.6% from 18.1%.

For the first eight months, inflation averaged 4.9%, faster than 4% in the same period a year prior but below the BSP’s 5.4% forecast for 2022.

The majority of sectoral indices closed higher on Tuesday, except for industrials, which declined by 43.34 points or 0.43% to close at 9,855.60, and financials, which went down by 2.79 points or 0.17% to 1,627.28.

Meanwhile, mining and oil climbed by 288.14 points or 2.49% to 11,847.99; property went up by 36.01 points or 1.21% to 2,999.13; holding firms increased by 58.05 points or 0.90% to 6,479.16; and services added 8.63 points or 0.51% to close at 1,702.32.

Advancers outnumbered decliners, 95 against 89, while 50 names closed unchanged on Tuesday.

Value turnover went up to P4.69 billion with 562.76 shares changing hands from the P4.19 billion with 822.65 million issues seen the previous trading day.

Net foreign buying rose to P526.37 million on Tuesday from the P61.43 million seen on Monday.

Unicapital Securities’ Mr. Fausto put the PSEi’s support at 6,580 and its immediate resistance at the 6,850 level. — J.I.D. Tabile

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